Reorientate, pension funds told

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China remains a lightweight in Australian pension funds, despite
its rapid emergence as a global heavyweight that could be the
world's largest economy mid-century.

That is the opinion of Nicholas Toovey, regional head of equity
for ING Investment Management, who lives in Hong Kong.

Mr Toovey is visiting local financial institutions, asset
consultants and pension funds to urge them to rethink their
tactical allocation to an economy that will, according to current
wisdom, continue to set growth benchmarks for the region.

Australian pension funds generally allocate 30-40 per cent of
their assets to Australian equities, about 30 per cent to
international stocks and the remainder to fixed-income, cash and
alternative assets.

The bulk of the international exposure is to US and European
markets, with single-digit percentage exposure to emerging markets,
such as China.

Mr Toovey said: "China will become a core asset class. Investors
need to take a tactical view."

ING, the second-largest investment manager in Asia, excluding
Australia and Japan, with about $US77 billion ($A98.7 billion)
under management, recently announced a deal with the Bank of
Beijing for a 19.9 per cent stake.

China remains a global investment hot spot despite fears about
the stability of its financial system because of bad debts, high
levels of corruption, an erratic legal system and the possibility
of social unrest.